Ban on tenant fees, including admin and agency fees: Tenant Fees Act (2019)

The Tenant Fees Act will come into force on 1st June 2019.

From 1st June, all tenant payments will be banned by default unless the Act specifically permits them. .

Summary :

  • tenancy deposits limited to 5 weeks’ rent
  • holding deposits limited to 1 week’s rent

landlords Face fines of £5,000 for first offence (civil) to £30,000 for second offence (criminal)

What’s in the Act?

Here are the key new rules contained in the Act.

1. All Payments Prohibited Except Rent, Deposits and Three Exceptions

Landlords or their agents will no longer be allowed to charge tenants for anything except: the rent, the tenancy deposit and a holding deposit (more on these below).

This means you will no longer be allowed to ask tenants to cover the cost of their own referencing. You also won’t be able to charge check-in, inventory or admin fees.

2. The 3 Exemptions

The only exceptions are for contract amendments and two kinds of ‘default’ fees, when the tenancy agreement is broken.

(a) Late Rent Fees

Landlords can still charge fees for rent payments that are over 2 weeks late, these are a maximum of 3% plus the Bank of England base interest rate on an annual basis.

(b) Lost Keys

Landlords can still charge tenants for losing their keys (or other security device if your property is high-tech),  they should provide evidence of the cost to you.

Remember, both default fees will need to be included in the tenancy agreement for you to be able to charge them, and previous rules about fair clauses will still apply.

(c) Changes to Tenancy

Landlords can charge up to £50 for making changes to the terms of the tenancy. For example, adding a new tenant to the tenancy or allowing a pet. This exception does not apply to renewals or changes to the length of the tenancy.

3. Cap on Tenancy Deposits

Tenancy or security deposits will be limited to 5 weeks’ rent for annuals rents under £50,000.

4. Cap on Holding Deposits

Likewise, holding deposits will be limited to 1 week’s rent.

5. New Rules on Holding Deposits

The holding deposit must be returned to the tenant: either in payment back to the tenant, or being put towards the first rental payment, or the security deposit.

There are some exceptions. In these cases the landlord can keep the holding deposits:

  • The tenant withdraws
  • The tenant doesn’t take all reasonable steps to enter the tenancy
  • The tenant fails a right to rent check
  • The tenant provides misleading information which materially affects their suitability to rent the property

6. Repayment of Holding Deposits

Landlords will only be able to hold the holding deposit for 15 days unless another ‘deadline’ date is agree in writing.
After the deadline, the holding deposit must be repaid within 7 days according to the above rules (see 5).

Hold my deposit with care please!

The holding deposit can be repaid to the tenant, or it can be put towards the rent or tenancy deposit.

What Are the Penalties to Landlords Who Charge Tenant Fees?

Landlord (or agents) who charge illegal fees will face paying huge fines : £5,000. If the offence is repeated within five years, there would be either a criminal offence or a fine of £30,000.

Local Trading Standards organisations will enforce the ban.

The rules will apply to all existing tenancies from 1st June 2020. So If this tenancy runs past 1st June 2020, then  the new laws apply  ie the deposit needs be less than the maximum five weeks’ rent before that date. You should get the excess back

The following is can still be charged as Part of the Rent?

  • Council tax
  • Utilities, e.g. gas, water, electricity
  • Television license
  • Communication services (e.g. broadband)

 

 

 

 

 

 

 

 

 

 

 

 

sting tenancies from 1st June 2020. So If this tenancy runs past 1st June 2020, then  the new laws apply  ie the deposit needs be less than the maximum five weeks’ rent before that date. You should get the excess back

The following is can still be charged as Part of the Rent?

  • Council tax
  • Utilities, e.g. gas, water, electricity
  • Television license
  • Communication services (e.g. broadband)